Avid Announces Results for Second Quarter

BURLINGTON, MA., 2011-07-21

Avid® (NASDAQ: AVID) today reported revenues of $161.3 million for the three-month period ended June 30, 2011, compared to $162.2 million for the same period in 2010. The GAAP net loss for the second quarter was $11.9 million, or $0.31 per share, compared to a GAAP net loss of $12.9 million, or $0.34 per share, in the second quarter of 2010.

The GAAP net loss for the second quarter of 2011 and 2010 included amortization of intangible assets, stock-based compensation, loss on asset sales, a legal settlement, acquisition-related costs, restructuring recoveries and charges and related tax adjustments collectively totaling $8.0 million and $10.9 million, respectively. Excluding these items, the non-GAAP net loss for the second quarter of 2011 was $3.9 million, or $0.10 per share, compared to a non-GAAP net loss of $2.0 million, or $0.05 per share, for the second quarter of 2010.

"While Q2 was difficult, I believe our business is sound,” said Gary Greenfield, chairman and CEO at Avid. “Our customer focus is unwavering and I believe we’ll succeed by continuing to listen to them and responding with innovative, open tools to help video and audio professionals and enthusiasts around the world create great content they can distribute anywhere, anytime.”

Revenues for the six-month period ended June 30, 2011 were $327.7 million, compared to revenues of $318.1 million for the same period in 2010. The GAAP net loss for the first six months of 2011 was $17.0 million, or $0.44 per share, compared to a GAAP net loss of $26.4 million, or $0.70 per share, for the same period in 2010. The GAAP net loss for the six-month period ended June 30, 2011 included $12.2 million of amortization of intangible assets, stock-based compensation, net restructuring recoveries, loss on asset sales, a legal settlement, acquisition-related costs and related tax adjustments. Excluding these items, the non-GAAP net loss was $4.8 million, or $0.12 per share, for the first half of 2011. The GAAP net loss for the six-month period ended June 30, 2010 included $19.8 million of amortization of tangible assets, stock-based compensation, restructuring charges, acquisition-related costs and related tax adjustments. Excluding these items, the non-GAAP net loss was $6.6 million, or $0.17 per share, for the first half of 2010.

A reconciliation of GAAP to non-GAAP results is included in the tables attached to this release.

Conference Call

A conference call to discuss Avid’s second quarter 2011 financial results will be held today, July 21, 2011 at 4:30 p.m. ET. The call will be open to the public and can be accessed by dialing 719.457.2617 and referencing confirmation code 4569475. The call and subsequent replay will also be available on Avid’s website. To listen via this alternative, go to the Investors tab at www.avid.com for complete details prior to the start of the conference call.

Use of Non-GAAP Financial Measures

This press release contains “non-GAAP financial measures” under the rules of the U.S. Securities and Exchange Commission. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with, disclosures required by generally accepted accounting principles, or GAAP. Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. The reconciliation of the GAAP to non-GAAP financial measures that we provide is in the tables attached to this press release.

Management considers both GAAP and non-GAAP financial results in managing our business. Non-GAAP financial measures are used internally, for example, in establishing annual operating budgets, in assessing operating performance and for measuring performance under incentive compensation plans. Non-GAAP financial measures are also used in operating and financial decision-making because we believe these measures reflect our ongoing business and allow meaningful period-to-period comparisons. We believe it is useful for investors and others to also review both GAAP and non-GAAP measures in order to understand and evaluate our current operating performance and future prospects in the same manner as management and to compare in a consistent manner the company’s current financial results with past financial performance. The primary limitations associated with our use of non-GAAP financial measures are that they may not include all items of income and expense that affect our operations and that the non-GAAP financial measures we use may not be directly comparable to those reported by other companies. For example, the terms used in this press release, such as non-GAAP net loss, do not have standardized meanings. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. We seek to compensate for this limitation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in the tables attached to this press release.

Use of Forward-Looking Statements

The contents of this release are subject to the completion and filing of our Quarterly Report on Form 10-Q. This release includes forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995. Statements in this press release that relate to future results or events are forward-looking statements and are based on Avid’s current estimates and assumptions. Forward-looking statements may be identified by the use of forward-looking words, such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “confidence,” “may,” “plan,” “feel,” “should,” “will,” and “would,” or similar expressions. Actual results and events in future periods may differ materially from those expressed or implied by these forward-looking statements because of a number of risks, uncertainties and other factors, including: Avid’s ability to execute on its corporate strategy and meet customer needs, including the ability to produce innovative products in response to changing market demand; general economic conditions and conditions within the rapidly evolving media industry specifically; competitive factors; fluctuations in Avid’s revenues, based on, among other things, Avid’s performance in particular geographies; and other risk factors and uncertainties disclosed previously and from time to time in Avid’s filings with the U.S. Securities and Exchange Commission. In addition, the forward-looking statements contained herein represent Avid’s estimates only as of today and should not be relied upon as representing the company’s estimates as of any subsequent date. While Avid may elect to update these forward-looking statements at some point in the future, Avid specifically disclaims any obligation to do so, even if the estimates change.

About Avid

Avid creates the digital audio and video technology used to make the most listened to, most watched and most loved media in the world – from the most prestigious and award-winning feature films, music recordings, television shows, live concert tours and news broadcasts, to music and movies made at home. Some of Avid’s most influential and pioneering solutions include Media Composer®, Pro Tools®, Interplay®, ISIS®, VENUE, Oxygen 8, Sibelius®, System 5, and Pinnacle Studio™. For more information about Avid solutions and services, visit www.avid.com, del.icio.us, Flickr, Twitter and YouTube; connect with Avid on Facebook; or subscribe to Avid Industry Buzz.